Why Reformulated Gas costs more

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A. It is blended to burn cleaner by reducing smog-forming and toxic pollutants...

Q. Where is it used?

A. .......... it is used in the Northeast, California, Texas, St. Louis and Chicago, northwestern Indiana and the six-county region of southeastern Wisconsin.

Q. Why does it cost more?

A. Refineries have to blend it specially. When oil supplies are tight and refining capacity is high, prices for reformulated gas can rise faster than gas prices in general.

Q. Is reformulated gas always more expensive?

A. Usually. Across the Midwest, reformulated gas has been more expensive than conventional gas in all but three weeks over the past year, federal Energy Department data shows. On average, it costs a driver in areas such as Chicago, St. Louis or Milwaukee an extra 8 cents a gallon to buy regular unleaded compared with someone living in a non-reformulated-gas area. Since the end of March, it has cost at least a dime more to buy reformulated gas. "

--------2008

But according to Motley Fool CAPS players there is no cost to Reformulatd Gas. It is all the same!Nonsense!!!!

That article above is obsolete...out of date.....Today's standards have gotten much much much worse since then.

"09/03/1990 Robert H. Gilman Akzo Chemicals Inc. Houston To reduce the financial impact of impending gasoline and diesel regulations, it will be necessary to reevaluate refinery unit operations in conjunction with innovative catalyst and process technology. The challenge will be to comply with these regulations without excessive retail gasoline prices. In addition, the industry will need to maintain profitability to remain competitive with other industries. Presently, industry experts predict that capital expenditure requirements for gasoline reformulation will exceed $20 billion.' Catalyst technology and operational changes will be ..."

You're on crack, Varchild - and you'd better hope I mean what a refinery does!

Reformulations like what you're talking about are a result of a number of factors. One is regulations, mostly to mitigate environmental effects. These vary locally by a large amount. Another is the fact that especially in cold areas of the country, different times of year demand different formulas of gasoline. Otherwise your car won't start.

The drivers for reformulation aren't primarily economic in nature and therefore you can't look at them from a business-economic perspective. The refinery companies have little ability to control what sorts of formulas they are required to deliver to gas stations.

At the end of the Clinton administration new rules for unlead gas formulas were passed. The USA went from maybe 5 national formulas at least 5 times as many formulas based upon geographical location. This change was not because the old formulas caused cars to fail to start during different times of the year or in different parts of the nation. It was because of environmental concerns. Primarily fears of smog or carbon dioxide emissions.

This change added significantly to gas costs. At current prices we are probably paying an extra 50 cents per gallon because the many local requirements set by the federal government. While paying an extra 50 cents a gallon may not break me financially, it does cause harm to the US economy as a whole.

While there may be an environmental justification to have 5 different standards depending upon the geographical location of the station selling the gas, there is no environmental justification to set 30 different standards for different parts of the country.